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Balkanizing Virginia Government

The debate on the Northern Virginia sales tax referendum has
focused on congestion and taxes. But another dimension that voters
should consider is the transparency and accountability of
government in Virginia.

The sales tax increase would fund the Northern Virginia
Transportation Authority as a complex new layer of government that
would collect taxes, issue billions of dollars of debt, acquire
land, and dole out money to contractors. Yet Virginia
transportation funding is already too complex with the overlapping
functions of the federal government, the state Department of
Transportation, the Commonwealth Transportation Board, local
governments, and highway-specific taxing districts. VDOT’s annual
report has five pages of flowcharts illustrating the state’s
transportation funding, which comes from the federal gas tax, the
state gas tax, a car sales tax, a portion of the general sales tax,
and numerous fees and debt proceeds. The NVTA makes that Byzantine
structure even more complex.

Complexity and diffuse authority breeds irresponsibility. Who
will citizens blame if the NVTA funds white elephant projects or
descends into scandal? The governor and legislature will surely
duck the blame saying that the NVTA mistakes are not their doing.
What about corruption? The relationship between the NVTA and
developers is already tight. Won’t contractor kickbacks be a
seductive possibility for a powerful but obscure independent
authority?

The NVTA debt issuance also raises accountability problems.
Governments are always tempted to evade short-term budget choices
and thrust costs onto future taxpayers through debt. If referendum
projects run over-budget and run out of cash, you can be sure that
the NVTA and the developer lobby will agitate for new bond issues -
without the transparency and oversight available for debt issued
directly by Richmond.

Politicians are using taxing and debt-issuing authorities like
Enron used “special purpose entities” to evade responsible budget
choices. Choices such as enacting former Governor Douglas Wilder’s
recent budget cut proposals, carving out a share of general fund
tax growth for transportation, or pursuing private funding options
akin to the Dulles Greenway project.

Passage of the November referendum would allow politicians to
avoid budget trade-offs by handing over taxing and debt-issuing
powers to an unelected mini-government. What’s next — new
mini-governments for universities or parks in regions that are
unhappy with Richmond’s budget allocations? Rather than balkanizing
state spending, let’s keep government in Virginia as simple and
transparent as possible and reject the sales tax referendum.